Why the British Right needs economic nationalism

Learning from the tariff reformers

Donald Trump has driven a stake through the heart of Britain’s butler economy. Even if the so-called ‘reciprocal tariffs’ are negotiated down, the administration clearly wants to maintain a universal baseline tariff of 10% that will disrupt global supply chains. With the London stock market plummeting and an economy fluttering barely above recession, our Prime Minister has come out with his usual combination of empty rhetoric and policy tinkering. Free traders want to believe that we can find refuge in a CANZUK agreement or Indo-Pacific Pact, but that is fantasy politics. The global trading system has been brought low, and leaving ourselves open to economic forces will mean auctioning off what little is left to China and other predatory powers, including the United States.

Decades of offshoring industry, importing cheap labour, laundering the money of distasteful foreign governments, and subsidising low-skill service jobs with state welfare has left us poorer, weaker, and more irrelevant. Technocratic statism disguised itself with a free-market flesh suit under the previous Conservative governments, growing the size of the state while protecting its rentier constituencies at the expense of productive industries. Fossil fuels, steel, cement, and concrete are all down. Building new houses, roads, railways, data centres, and power stations is all but impossible. British Steel’s closure by Chinese investors is just the latest chapter in our economic malaise.

The problems are obvious. But the British Right has lost its way on economics since the New Labour supremacy. Successive Tory leaders believed we needed to sit in a squishy ‘middle way’ of private wealth creation funding public redistribution, with unrealistic climate goals slapped on along the way. Escalating crises during this century turned Conservative governments into mindless amoeba, responding only to direct stimuli instead of proactively shaping policy or events. Simplistic narratives sprung up about what the Brexit realignment meant, or asking ‘what would Thatcher do?’ ad nauseum. All the while, leader after leader praised free trade while our market economy became more constrained. The Conservatives have simply not had a theory of economic statecraft since the ’90s.

That is probably why so much of what passes for ‘debate’ within the Conservative Party is just shallow boomer nostalgia for a time when the Right was in charge. An aged membership believes the promise of inheritance tax cuts and some Musk-style trimming of the civil service payroll should do the trick in winning over younger voters before packing them off to fight in Ukraine — but of course, not before they have paid their hefty rent, income tax, and national insurance to fund their comfortable retirement. Boomer Conservatives prefer to go down rabbit warrens of culture war fights on Facebook instead of thinking seriously about how to fix our broken economy. Reform UK is not much better, with policy slop such as taxing renewables subsidies or ‘countering housebuilding’.

Some diagnoses have been offered from Westminster wonks. Postliberals argue that neoliberal capitalism has hollowed out the industrial heartlands, atomised our social existence, and robbed future generations of their prosperity. Much rings true in their assessment, but the solutions offered, especially from the Blue Labour lot, look like reheated social democracy or a hankering for the imagined economic and cultural stability of mid-century Britain. The truth is that there is no going back, especially now that two million migrants have been allowed to enter the country these past few years — an unprecedented migration wave that our idiotic elites will allow to become permanent with devastating consequences for our country’s way of life.

Free marketeers have thoughtfully engaged with the problems around energy and housing, understanding that you cannot reindustrialise without cheap and abundant energy, and that you cannot expect people to support capitalism if they do not themselves have capital. Younger free marketeers have also ditched some of the older generation’s stances on immigration and crime. But blind spots remain, especially around free trade and what well-designed industrial policy can achieve. The US-led world order that enabled decades of trade liberalisation is crashing down as we speak, and years of deindustrialisation have left Britain vulnerable to the unfair practices of bigger powers. Keeping an open economy going can only be sustained by a bigger government at home at the expense of our productive capacity.

What we need is a revival of an older, harder-edged conservative economics: a free market in one country. The inevitable logic of Brexit, Chinese state capitalism, and American protectionism is that the world is deglobalising fast. Great powers are competing for scarce resources, reshoring supply chains, and building up their militaries. This does not mean pursuing economic autarky. Such an attempt would utterly fail in Britain. Even America and China would fall short if they really tried. But there are ways in which economic nationalism can equip Britain to protect its national interests. This means recognising where the nation state must step in when the market falls short, as well as getting out of the way where necessary.

Learning from the Tariff Reformers

Economic nationalism is not a new instinct for the British Right, but a tradition rich with history and precedent. Interwar Britain is a good example of how conservatism has used it to respond to geopolitical volatility. In the wake of the First World War, the British Right found itself confronted with a new ideological threat in the shape of socialism at home and communism abroad, with fascism and Nazism lurking around the corner. Conservatism was recast as a creed that would defend the rights of property and national pride in the age of mass politics. There were competing schools of thought over how this might be done. But it was the admirers of Joe Chamberlain who believed that tariff reform would be the cure.

In the free trade mythology, the campaign for tariff reform deeply wounded the Conservatives and lost them the general elections of 1906, 1910, and 1923. While this has an appealing simplicity to it, the history is more complicated. Historians like E.H.H. Green have made the convincing case that the campaign for tariff reform actually kept the Conservative flame alive during its darkest years, introducing the party to new means of organising mass politics, and providing a positive policy platform that could compete with New Liberalism and then Labour socialism. The tariff reformers’ logic was that tariffs on agricultural and industrial goods into the British Empire would protect imperial industries, bind the colonies closer together, and fund social welfare programmes at home. Tory leaders like Andrew Bonar Law and Stanley Baldwin, despite their protectionist views, chose to prioritise party cohesion over federating the empire.

The campaign began in 1903 when Joe Chamberlain launched the Tariff Reform League (TRL) and resigned from cabinet. In many ways, the movement he created would resemble the smorgasbord of Eurosceptic groups that sprung up during the 1990s and 2000s following Thatcher’s Bruges Speech – another dynamite nationalist movement that triggered intense infighting and disagreement over its role in shaping the party’s electoral fortunes. Tariff reform relied on the gut instincts of the diehard Tory nationalists to gain traction with parliamentarians and activists. But it also tapped into an intellectual strain within the British Right based around Balliol College Oxford and the London School of Economics, bring together a unique collection of individuals.

Some were close friends of Chamberlain and former Liberals such as Lord Milner, Leo Maxse, and Leo Amery. But arch-traditionalists like Willoughby de Broke and Lord Salisbury, son of the Victorian prime minister, were also on board. Arthur Steel-Maitland, founder of the Unionist Social Reform Committee, gave policy heft to interwar economic nationalism. America had turned its back on Europe following the Peace of Versailles leaving Britian and France to lead a fractured continent and guard against revolutionary Russia. Tariff reform proposed a way to restore national strength, but elites felt compelled to follow the moralism and dictates of Victorian laissez-faire.

Among the most significant figures was Sir Henry Page Croft, an old-fashioned Tory squire and romantic nationalist, who became the unfiltered voice of the patriotic Right during the interwar era. Croft helped lead the TRL as well as other imperialist campaign groups like the Confederacy, Reveille, the Imperial Union, the Empire Industries Association as well as launching the National Party in 1917 after spending twenty-two months on the western front. Historian Andrew S. Thompson described Croft’s worldview:

Like a thriving business, the empire needed close attention, careful management, and an eye constantly on the future. The passivity of the state, or of its political leaders, was thus to be condemned. What was required was creative and dynamic government, with administrative and legislative programmes aimed at furthering ‘imperial unity’.

Among the businessmen who backed this vision were the media barons Lord Beaverbrook and Lord Rothermere. They bankrolled the United Empire Party to win the 1930 Paddington South by-election, sending political shockwaves through Baldwin’s leadership. But the Great Depression and the Smoot- Hawley tariffs in America changed the game. The Conservatives formed a National Government with Baldwin dangling the strings of the turncoat Labour leader Ramsay MacDonald. In 1932, imperial preference was introduced at the Ottawa Conference under Neville Chamberlain’s chancellorship, fulfilling his father’s legacy.

But by the time tariff reform became a reality, the world was slipping towards the Second World War and the end of British superpower status. There are strong reasons to see the neglect of economic nationalism as contributing towards postwar decline. For one thing, it was the United States that demanded Britain should drop imperial preference and allow American trade to flow unimpeded. Historian Correlli Barnett forcefully argued that Britain wasted the interwar years to build up industry and defence in pursuit of maximising national power. Nevertheless, the tariff reform movement gave economic nationalism a significant ideological space within the Conservative Party. Even after 1945, support for imperial tariffs persisted among party members, including Thatcher in the 1950s.

What can economic nationalism teach us now?

Britain in 2025 is a diminished and vastly different country from a hundred years ago. You might reasonably ask what possible relevancy does tariff reform have for a stagnant economy on the coast of northwestern Europe that is currently paying other countries to take its sovereign territory. Far from proposing some kind of modern day CANZUK customs union, what the tariff reformers can teach us is the peril of making policy for the world as we wish it to be rather than as it is. British free traders resisted the calls for imperial preference until it was too late, allowing another superpower to speed up the nation’s decline and undermine its ability to sustain independent productive power. From Suez to Iraq, Britain has lashed itself to American defence and foreign policy to the detriment of its own national interests.

Free trade, which has never actually existed at a universal level in any human era, is going intoreverse. British economic policy must change to meet the situation. This means thinking creatively about economic statecraft once again. The state must not just be much smaller, but much stronger. To follow a Barnettian diagnosis of British decline, rather than a Hayekian one, the British Right should be unrelenting in its focus in building a British state that is capable of exercising power at home and overseas in the service of specific goals. It must do so quickly and without the blockages created by the bureaucracy and the courts. At the heart of this vision should be the revival of our defence industrial base, and the decoupling of our economy from China, so we do not become a vassal state of another superpower.

This means the state should intervene in critical industries like steel, rare earths, biotechnology, artificial intelligence, robotics, and semiconductors. In pure cash terms, this should not be a massive spending splurge, but a targeted programme of investment that can take the form of tax credits, loans, and grants Procurement rules must be torn up and rewritten to reward innovation and domestic producers. Free trade with reliable allies such as Canada, Australia, and New Zealand should be supported but steep tariffs on electric vehicles, solar panels, wind turbines, and other critical technologies from China should be introduced rapidly. But this should be combined with a big bang of deregulation in energy, tech, housing, and infrastructure to unleash the economy’s animal spirits.

This is how the British Right can deliver a free market in one country. Tax and regulatory reform concentrated on the productive capacity of the economy, reinforced by state intervention that supports new technologies, secures resources of national importance, and protects industry from hostile countries that do not engage in fair trade. Sometimes this will mean slaughtering a sacred cow or two. For example, nationalising British Steel and using state power to rebuild the steel industry is now unavoidable should we wish to rearm and reindustrialise. But this is no call for a return to an imagined yesteryear. It is a recognition of the cold hard reality that faces the country. Trump is turning the world upside down. Pretending that we are still in the benign economic and geopolitical conditions of the 1990s is the pernicious dream from which our elites must wake up from. Otherwise, our continued slide into decline and irrelevancy will become irreversible.

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Image credits: Creative Commons Attribution 4.0, Joseph Chamberlain. Reproduction of woodcut by W. Nicholson. Wellcome V0001057.jpg

This article was written by Joseph Highbury, a Pimlico Journal contributor. Have a pitch? Send it to pimlicojournal@substack.com.

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